Governor Cuomo Instructs State Labor Department to Convene Wage Board to Investigate and Make Recommendations on Raising Minimum Wage for Fast Food Workers

Governor Andrew M. Cuomo today instructed Acting State Labor Commissioner Mario J. Musolino to empanel a Wage Board that will investigate and make recommendations on an increase in the minimum wage in the fast food industry. The Wage Board will take approximately three months to examine the issue and make recommendations regarding a possible increase. Those recommendations are expected by July, and do not require legislative approval in order to become enacted.

Under New York State law, a Wage Board can suggest changes to the minimum wage in a specific industry or job classification if it finds that wages are insufficient to provide for the life and health of workers within that industry or classification. Despite being a well-established and thriving multi-billion dollar industry, the fast food sector employs tens of thousands of minimum wage workers in New York State – the vast majority of which are women, primary breadwinners for their households, and recipients of welfare or other forms of public assistance.

“If you work full time, you should be able to provide for yourself and your family and move beyond poverty. That is what the minimum wage is all about, but for too many fast food workers in New York today that is simply not the case,” Governor Cuomo said. “The minimum wage must be a wage that allows for a decent living – not one that condemns hard-working people to an endless cycle of poverty and government assistance – and that is why I am taking this action. We must fulfill the promise of honor and justice for fast food workers in New York, and I urge the Wage Board to stand up for what is right and help us move forward.”

"This is a day of hope and inspiration for underpaid Americans, not just in New York but across the nation,” said Mary Kay Henry, International President of the Service Employees International Union (SEIU). “Fast food cooks and cashiers who are fighting for $15 and the freedom to form a union have shown that when working people stick together, our voices are heard. Working moms and dads are fed up with big corporations like McDonald's making big profits and paying poverty wages that slow down our economy. Governor Cuomo’s leadership will open the way to raise their wage floor to $15, re-balance our economy, and strengthen communities."

“Today, Governor Cuomo and New York State are leading the way and offering hope and a path forward for the close to 200,000 fast food workers in New York, along with the millions of others in our country making too little for too long,” said Hector Figueroa, President of 32BJ SEIU. “$15 and a union would lift thousands of moms and dads out of poverty, inject hard-earned dollars into communities across the state and build momentum in the fight for fair wages for airport workers and other low-wage workers. Raising the wage for fast food workers is good for communities, good for the economy, and good for New York. We applaud Governor Cuomo for taking this important step forward.”

“This is an historic opportunity for fast-food workers," said Flavia Cabral, a 53-year-old McDonald's worker and mother of two from the Bronx who hopes one day to send her kids and grandkids to college. “No one in New York can survive on $8.75 an hour, so we've been on strike nine times. All we've ever asked for is a fair shot at the middle class and a chance to provide for our families. Today, Governor Cuomo heard us— and soon, I know we're going to get to $15. I am inspired today, because $15 an hour would completely change my family’s life."

Appointing the Wage Board

As required by statute, the state labor commissioner will call a wage board as he has determined the wages for fast food workers in the hospitality industry are inadequate. His full determination can be found here.

The board, made up of at least three members with equal representation from labor, businesses and the public, will review adequate minimum wages and regulations for fast food workers and make a recommendation to the commissioner. The Wage Board members will be Byron Brown, Mayor of Buffalo, representing the public; Kevin Ryan, Chairman and Founder of Gilt, MongoDB, Business Insider and Zola and Vice Chairman of the Partnership for New York City, representing businesses; and Mike Fishman, Secretary-Treasurer of the Service Employees International Union, representing labor.

In accordance with statute, the Wage Board will hold two public hearings – the first in Buffalo and the second in New York City. The board’s final recommendation is expected by July. The commissioner will then have 45 days from its receipt to issue an order.

A complete schedule of public hearings and meetings will be announced soon.

Building on Past Progress

Governor Cuomo has consistently fought to increase the minimum wage in New York State. In 2013, the Governor signed legislation that raised the minimum wage from $7.25 to its current level of $8.75. That legislation included another incremental increase to $9.00 that will take effect by the end of 2015. Continuing to build on that progress, the Governor launched the “Fight for Fair Pay” campaign earlier this year to support his proposal (originally announced as part of his 2015 Opportunity Agenda) to further increase the minimum wage in New York State. That proposal would bring the minimum wage to $10.50 statewide and $11.50 in New York City where the cost of living is higher.

This is also the second time that the State Department of Labor has empaneled a Wage Board under Governor Cuomo. In July 2014, the Governor directed the Department to convene a Wage Board to review and recommend any changes to the relevant regulations for food service workers and service employees (tipped workers) in New York State. As a result of that Wage Board, the tipped cash wage amounts for tipped workers will increase from their current rates of $4.90, $5.00 and $5.65 – rates which have not increased since 2011 – to $7.50 per hour on December 31, 2015. More information on the recommendations that the Department of Labor accepted from that Wage Board to benefit tipped workers can be found here.

The Facts

In New York State, entry-level fast food workers earn approximately $16,920 per year – an amount that is well below the poverty line for a family of three and just $1,010 above it for a family of two.1 Additionally, despite New York’s recent success in increasing the minimum wage, the minimum wage for fast food workers across the nation has barely moved – increasing just 0.3 percent since 2000 (adjusting for inflation).2 By comparison, earnings for the average fast food CEO have more than quadrupled since 2000 (adjusting for inflation), to an average of $23.8 million in 2013.3

The negative societal impact of the low wages earned by workers in the fast food industry is amplified by the demographic breakdown of the industry’s labor force. More specifically:

73 percent of fast food workers are women, 70 percent are over the age of 20, and more than two-thirds are raising a child and are the primary wage earners in their family.4

Fast food workers are twice as likely to be receiving public assistance compared with all working families.5

52 percent of all fast food workers nationwide – the highest rate of any industry – have at least one family member on welfare, which costs taxpayers $7 billion annually in public assistance.6

In New York State, 60 percent of all fast food workers have at least one family member on welfare. New York also ranks first in public assistance spending per fast-food worker, at $6,800, which costs taxpayers $700 million annually in public assistance.7